vacation club: Bankruptcy Alberta

Posted on Friday, January 26, 2007

We have a membership to a vacation club (not a timeshre) that is supposedly tranferable (sellable). We have large numbers of airline points. What is the status of these in a consumer proposal?

Labels: consumer proposal

1 Comments:

At 11:16 AM, Barton Goth, GCO Inc. Bankruptcy Trustees said…

As there is no vesting of assets when filing a consumer proposal in Canada, all that must be done is that the vacation club must be valued and that value taken into consideration when putting together the proposal itself. This is done because the Bankruptcy and Insolvency Act requires that a consumer proposal must provide a greater recovery for the creditors then they would receive in a bankruptcy.

As of the airline points, there is no clear answer to this, I have seen situations where they have been canceled(this is typically when they are airline points that are awarded through a bank who has been forced to write down the debt as a result of the proposal) and I have seen situations where there has been no impact (typically where the airline awards travel points and it has nothing to do with your debt load).

For more information you are best to contact a licensed trustee and they will be able to provide a more detailed explanation.